Market watch: Asian stocks steady ahead of Fed decision; oil holds firm after Ukraine strikes Russian refineries

Asian equities were mixed on Monday as investors braced for an expected interest rate cut by the US Federal Reserve later this week, while oil prices held steady after Ukrainian drone strikes on Russian refineries raised concerns about supply disruptions.Markets have rallied in recent weeks on signs of cooling US inflation and softer jobs data, which give the Fed space to resume its rate-cutting cycle. According to news agency Reuters, traders are fully pricing in a 25-basis-point reduction, taking the funds rate to 4.0–4.25 per cent, though a small chance of a larger 50-point move remains. Futures also suggest as much as 125 basis points of easing could follow over the coming months.Attention will be on the Fed’s updated projections and comments from Chair Jerome Powell, with investors looking for signals on the pace of further reductions. “After cutting policy rates 25bp, Chair Powell is likely to guide toward a series of further rate cuts,” said Andrew Hollenhorst, chief US economist at Citi, cited by Reuters.US President Donald Trump has continued pressing the central bank, saying on Sunday that “I think you have a big cut.

It’s perfect for cutting.”In Asia, trading was subdued with Japan shut for a holiday. Hong Kong and Singapore edged higher, while Shanghai slipped after data showed weaker-than-expected growth in retail sales and factory output. South Korea hit another record after the government dropped plans to raise capital gains tax on investors, AFP reported. Losses were seen in Sydney, Taipei, Manila and Wellington, with Australian lender ANZ sliding after agreeing to pay a record A$240 million fine over misconduct.Meanwhile, crude oil prices were little changed in early trade after climbing more than 1 per cent last week. Brent crude added 0.4 per cent to $67.28 a barrel and West Texas Intermediate rose 0.5 per cent to $63.01, according to AFP.Reuters reported that markets remain cautious after Ukrainian drones hit major Russian energy sites, including the Primorsk terminal, which handles about one million barrels per day and the Kirishi refinery, one of Russia’s largest processing plants.

JPMorgan analysts said the attacks “suggest a growing willingness to disrupt international oil markets, which has the potential to add upside pressure on oil prices.

”Geopolitics also loomed large as Washington and Beijing resumed trade talks in Madrid. The discussions, led by US treasury secretary Scott Bessent and Chinese Vice Premier He Lifeng, will cover tariffs and disputes over Chinese apps. At the same time, Trump reiterated his call for Europe to match US sanctions on Russian energy, warning, “I don’t want them to buy oil.”